Debt deal remains elusive—but there’s a chance

President Obama and House Republicans failed to reach an agreement on increasing the $16.7 trillion debt limit, but the ongoing talks are being seen as a hopeful sign that the two sides can put an end to a potential economic disaster.

Staff-level talks continued overnight and negotiations will go into Friday – the 11th day of the government shutdown– and possibly the weekend.

Senate GOPers met with President Obama at the White House in the morning for about 90 minutes. The commander in chief is scheduled to meet with small business owners in the afternoon to discuss the need for Congress to reopen the government and pay the bills it has racked up.

Few details emerged from the Friday meeting. Republican Sen. Lindsey Graham of South Carolina said in the afternoon that he thinks the House will pass some type of legislation in the next 24 hours to reopen the government and that in 48 hours there could be progress on the debt ceiling.

“I think you’ll see something come out of the House in the next 24 hours to reopen the entire government that will have changes to Obamacare that will not destroy the program but make it better.”

Republican Sen. John Cornyn of Texas was far less optimistic, saying “what could have been a productive conversation” ended up being “another predictable lecture form the president that did not lay out a new path forward. Senate Republicans are back at the Capitol and will continue to discuss plans to cut spending and open the government.”

President Obama called House Speaker John Boehner on Friday, White House spokesman Jay Carney confirmed at a news conference. He said the two had a “good conversation” but “agreed that all sides need to keep talking.”

Carney added Obama still has “concerns” with the House GOP’s proposal for a six-week debt limit increase, namely that it will leave the country in “the same precarious state that it’s currently in.” Carney reiterated the president’s stance that the threat of default needs to be removed as a point of leverage in budget negotiations.

As demonstrated from Thursday night’s meeting, a deal is far from certain. House Speaker John Boehner and a group of 20 Republicans presented an offer to increase the Treasury’s borrowing authority for six weeks in exchange for negotiations for a long-term deficit and tax overhaul. The two sides could not hammer out a deal.

Several hurdles remain, including Tea Party members. Obama has previously said that he would not agree to any extension that didn’t first end the shutdown. The latest GOP offer did not meet that standard.

Texas Sen. Ted Cruz, a lead instigator of the initial shutdown over Obamacare, did not back down from the debate while headlining the conservative rally at the Value Voters Summit Friday alongside fellow GOP firebrands Sens. Marco Rubio and Rand Paul. “In my view the House needs to keep doing what it’s been doing, which is standing strong!” Cruz said.

However, Republican Rep. Hal Rogers, the chairman of the House Appropriations Committee, said on Thursday evening that funding the government and ending the shutdown is now part of the discussions.

Republican Rep. Lynn Jenkins of Kansas –vice chairman of the House GOP Conference, said House leaders hope to have the government opened by Monday.

Other obstacles include some Democrats, like House Minoirty Leader Nancy Pelosi, who believe the a six-week extension is “not the right way to go,” insisting it should be at least one year.

And it’s not even clear if Boehner can actually control enough of his caucus to cobble together a bipartisan majority. Many of the GOP’s most conservative members have refused to vote for any debt ceiling increase and have demanded that any funding for the government be tied to a kneecapping of Obamacare.

A new NBC/WSJ poll showed that support for GOPers is plummeting while the approval of Obamacare is rising. The public’s growing frustration only increases pressure on GOP leaders while making it easier for Obama to stand his ground.

The country is just six days from the country entering into default unless Congress can agree to a debt ceiling increase.